The Growth Rate of Potential Output Might Be Decreased by an Expansionary

question 56

Multiple Choice

The growth rate of potential output might be decreased by an expansionary fiscal policy if

• A)the policy crowds out private investment.
• B)public investment has high productivity.
• C)the simple multiplier is small.
• D)the composition of output is not altered.
• E)the budget deficits are persistent.

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Definitions:

Personal Reference

The use of personal experiences, feelings, or opinions by an individual to explain or support a point during communication.

Arouse Enthusiasm

The act of generating excitement, motivation, or keen interest in individuals or groups towards a certain activity, goal, or subject.

Vroom-Jago Leader-Participation Model

A leadership theory that suggests the effectiveness of a decision-making process is influenced by the leader's involvement and the participation of subordinates.

Shares the Problem

A collaborative approach to problem-solving where team members or stakeholders work together to identify, analyze, and solve issues.